The Freedom Effect

"The Freedom Effect" is an inspiring video about a bank that is building a better economic future for the world as a whole,
showing how individuals can impact communities who need assistance with economic development. We invite you to watch it and welcome you to share it.

Home Affordable Modification Program

The Home Affordable Foreclosure Alternatives (HAFA) program was developed to give homeowners a way to settle their mortgage debt without going through a foreclosure.

The goal of this program is to help you sell your home in a short sale and settle your mortgage debt if you owe more on your mortgage than your house is worth and are unable to qualify for a home loan assistance program.

This federal government program streamlines the short sale approval process and offers financial assistance to help you with relocation.

Why should I consider a HAFA short sale?

If you owe more on your mortgage than your home is worth and are unable to keep up with your mortgage payments, a HAFA-eligible short sale will:

Help you avoid foreclosure

Allow you to be "fully released" from any further liability on your mortgage

Eligibility Requirements

Treasury's guidelines state that a loan meets the basic eligibility criteria if the servicer
verifies that all of the following conditions are met:

The property is the borrower's primary residence

The mortgage is a first lien originated on or before January 1, 2009

The mortgage is delinquent or default is reasonably foreseeable

The current unpaid principal balance is less than or equal to:

–– $729,750 for a one-unit property
–– $934,200 for a two-unit property
–– $1,129,250 for a three-unit property
–– $1,403,400 for a four-unit property

The property is not vacant or condemned. (The property may be vacant providing certain conditions have been met and can be validated by independent third party documentation.)

Additional important items to note:

If required by investor or insurer, the borrower’s total monthly mortgage payment must exceed 31% of their gross monthly household income to be eligible for HAFA.

Treasury requires that a borrower have a documented financial hardship, evidenced by a signed Hardship Affidavit or RMA, wherein the borrower has represented that he or she does not have sufficient liquid assets to make the monthly mortgage payments.

If a borrower is current or less than 60 days delinquent and would like to be considered, they may still be eligible pending further review of their financial situation.

Loans with a scheduled foreclosure date may still be considered for HAFA depending on the timing of the scheduled foreclosure sale.

Please note that in addition to Treasury’s standard HAFA eligibility requirements, Liberty Bank must adhere to investor and mortgage insurance guidelines as well as all applicable laws and regulations.

Second lien holder's written approval and agreement not to pursue deficiency balance

Other documents per investor and insurer request

VALUATIONS
Establishing property value
Valutaion is obtained based on investor guidelines and typically consists of an interior appraisal. The valuation must be less than 90 days old at the time the Short Sale Agreement is issued.

Disputed valuations
Liberty Bank follows both its service provider and investor guidelines when determining what information is needed to dispute a value. A minimum of three sold comparables must be submitted. These must be comparable to the subject property's square footage, amenities, age and location, and must have closed within six months prior to the effective date of the disputed valuation. If the dispute is based on repairs, an estimate of repairs prepared by a licensed contractor is required.

Periodic reassessment of value
We order a new valuation every 90 days during the HAFA process. If the new value comes in lower, we will reduce the minimum net sales proceeds (MNSP) accordingly. If the new value comes in higher than the prior value, we will not change the MNSP.

PAYMENTS DURING MARKETING PERIOD
None required

DEED-IN-LIEU (DIL) POLICY / SPECIAL PROGRAMS
Subject to investor and insurer approval, the borrower is allowed a DIL (a disposition option in which a mortgagor voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage) if their short sale marketing period expires without an acceptable offer, with the following requirements:

Borrower must provide clear and marketable title

There must be no adverse change in property condition

Property must be left in broom clean condition

Borrower must vacate within 30 days of the DIL agreement

AVERAGE TIMELINES

Issuance of Short Sale Agreement: While decisions are generally made within 30 days, servicer is allowed 45 calendar days and if unable to make a decision, will notify borrower on or before the 45th day and provide written updates every 15 calendar days until a decision is reached.

Borrower returns Short Sale Agreement to servicer: 14 days

Marketing of property: 120 Days

Borrower submits offer to servicer: Within three days of receipt of offer

Servicer decision after offer submittal: 10 days

Closing: 45 days after approval, or earlier when requested by borrower or required by state law

Please note that timeframes will vary based on investor, MI, Second Lien holder approval.

Contact information
Borrowers can reach out to Liberty for questions at any time by phone, fax, or email: